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The mortgage industry has seen drastic changes over the past couple of years during the pandemic. Many of the changes adopted out of necessity have proven to be useful tools in providing a timely and smooth experience for borrowers. What can you expect to see this year? Keep reading to find out what our readers predict for the coming year.
Daniel Carter, Marketing Manager of Loanx.
Two Trends in Mortgage Lending
Rates Will Rise
The interest rate forecast for 2021 is already out. Mortgage rates have risen for seven weeks in a row. A 30-year fixed mortgage currently costs 3.18%, according to Freddie Mac’s April 1, 2021 survey. In January 2021, the rate was 2.65%, resulting in a strong refinancing volume. The number of homeowners eligible to refinance fell from 18 million to 12.9 million in a month when mortgage rates hit 3%, according to Black Knight.
The number of homeowners eligible to refinance will continue to decline as rates climb, and industry professionals forecast that rates will continue to grow. According to the MBA’s latest forecast, the average 30-year fixed mortgage rate will hit 3.6% by year’s end. This is an increase of nearly 0.4% from Freddie Mac’s April 1 industry survey.
Technology Will Dominate
The industry is expected to have another good year in 2021 despite rising interest rates and falling refinance volumes. Nonetheless, keeping up with the booming mortgage market is vital to your success this year. So, how can you succeed? Technology.
Before the worldwide pandemic, using automation to streamline the mortgage process was a crucial corporate driver. But, with record-breaking mortgage originations expected this year, it’s a must. That’s why mortgage tech adoption is a big trend for 2021. Now is the time to prepare your systems and processes for another prosperous year.
Modern mortgage technology does more than speed up processes. It tracks everything from applications through audits and provides reporting to keep everyone informed, from investors to remote team members. It even helps you maintain the optimum level of capacity for variable volumes.